SHARES IN contractor Mowlem dropped from just over 200p to under 165p this week after the contractor issued a profit warning because of unexpectedly heavy losses in Australia.
The company will make a £12M exceptional provision in September's interim results, a spokesman said. This will cover losses on several housing contracts.
Materials and subcontract costs have risen substantially since the Australian contracts were signed in 2002, the company said. Difficulties were confined to the heavily populated eastern New South Wales.
'Other firms have also been affected by rapidly rising costs in this overheated area, ' said the spokesman.
Mowlem reported pre-tax profits of £45.2M for the year ending 2003. Australia represents about 20% of the group's overall £1.98bn turnover.